Daily dividend news for investors in dividend stocks

High Yield Dividend Investing During Retirement

Published Tue, 09 Jul 2019 10:15:28 -0400 on Seeking Alpha

I have been wondering how one might model high-yield dividend investing for a while. One of the challenges of modeling any aspect of investments is to find relevant data. Sales material rarely reveals the truly relevant information. One needs to know something about historical failures of one kind and another.
In this context, I was pleased to run across the information shown in Figure 1. These data span 20 years, from 1996 to 2015. This is shorter than one might prefer, but does span two recessions and two monster bull markets. This suggests that these data represent a reasonable basis for forecasts.
The figure shows the forecast yield, at which one purchased the stocks, and the realized yield, which is what actually occurred after dividend cuts and other negative events. The realized yield drops significantly below the forecast yield beginning at about 7%.
One can see that overall it makes little sense to seek portfolio yields above the level of 7% for common stocks. One might do so for specific companies, or perhaps specific market sectors, if one believes one has good reason. But one must respect that many have failed in the past while reaching for yield.
Figure 1. Forecast yield and realized yield for the period 1996 to 2015. Source
The Monte Carlo Modeling
The model approach used in this article is Monte Carlo simulations, which I introduced and discussed here. If you have let any investment advisor work up an evaluation for you, or used the web tools... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
SPDR S&P DIVIDEND ETF 103.80   0.0 0.00 2.42 2.36


Older articles featuring Spdr S&p Dividend Etf (SDY):
Dividend Investing In A Volatile Market
Dividend Growth: Why It Matters
iShares Select Dividend ETF: Investors May Want To Seek Opportunities Elsewhere
Buy Dividends, Not Buybacks
Dividend Growth Investing Doesn't (Necessarily) Work
Performance Of Dividend ETFs During The Crash
DGRO: Here's Why This Is Our Top-Pick Among Dividend Growth ETFs
Reduce Volatility With High Yield - The Income Method
No Dividend-Strategy ETFs Are Dividend Champions, But There Is One Contender
PEY: Investing In Dividend Aristocrats With A 4-5% Yield